At Fortis we place a great premium on a thirst for knowledge and we pride ourselves on being continual learners. The year end is an ideal opportunity to take some time to reflect on the last 12 months and the lessons learned. As 2016 comes to a close, there are three distinct lessons that I have taken away from the craziness of the past year. So, without further ado they are:

1.Macroeconomic forces are unpredictable. 2016 was a vivid reminder of the dangers of trying to predict macroeconomic trends and their effects on the market. The Fed was going to raise rates until they didn’t. Brexit would never happen until it did. The market wouldn’t recover from Brexit for months until it rebounded in days. Trump would never win the election until he did. A Trump victory would cause the markets to tank until they rocketed upward. If Trump won the presidency the Fed wouldn’t raise rates, until they did. These are just a few examples of the unpredictability of macroeconomic forces and their subsequent effects on the market. We continue to believe that the best way to hedge against this unpredictability is to invest in great companies that are equipped to excel in any market conditions.

2.Bull markets don’t end in pessimism. After the worst start to the year in recorded history, huge fears over the Chinese economy, the complete collapse in commodity prices and the Fed’s changing policy to begin raising rates there were a lot of signs that the 7-year bull market may be ending. However, anecdotally, Main Street still hates stocks. When is the last time you heard someone talking about their favorite stock idea at a cocktail party? Or an Uber driving tell you about the last stock he bought? Or your neighbor make you feel bad because he made so much money in XYZ stock and you should have too? The general public has no optimism on stocks, and historically bull markets don’t end until they do.

3.Index participation can be a powerful mover of stock prices. Since the election, the general market indices have gone hog wild to the upside. If you own a stock that isn’t part of one of the primary market indices (S&P500, Russell 2000, etc.) your stock likely trailed the rally. When the really big money is moving into or out of an asset class, be aware of where that money is flowing and if your companies are going to participate or not. Don’t forget, this works the same on the downside!

4.There’s always a bull market somewhere and you can’t afford to miss it. While we don’t always agree with Jim Cramer, this saying of his is very true. In 2016, it was a bull market in energy and industrial stocks. After the collapse of oil prices in 2014/2015 and the subsequent bankruptcy of dozens of small cap exploration and production companies, the tide turned in early 2016 and many of these energy/industrial companies saw stock price recoveries for hundreds of percent gains. Often the news cycle is very pessimistic at the bottom, and there seems to be every reason in the world not to own that sector at that point in time. However, it can be very rewarding to carefully watch cyclical sectors after they have collapsed and look for signs of a bottom (large intraday price reversals to the upside, stocks no longer moving down on bad news, etc.) as these signs will appear long before improvements in the underlying numbers show up in earnings reports.

As you think about the new year and your personal financial situation, we want to reiterate that:

·The best way to grow your retirement accounts is to save more. The number one way you can grow the balance in your retirement accounts is to contribute more to these accounts on a regular basis. There are a lot of different ways that you can accomplish this. If you have a budget make sure you are following it, and if you don’t have a budget, then create one. If you don’t love your job it may be time to consider a career change that will increase your earnings capability. If you own a small business take the time to really figure out if you are maximizing your profitability.

·Free money is likely your highest return investment. Take advantage of all the free money available to you. If you work for a company that has a 401(k) or other retirement plan, make sure you are contributing at least up to the maximum company match. If you own a small business or get stock options from your company, make sure you are taking the proper tax deductions. It may not be as sexy as picking the hot new investment, but taking advantage of this free money will allow you to maximize your wealth. If you calculate the free money given to you (or saved) over the amount you invested, this is likely the highest return investment opportunity in front of you. For example, a 50% match on a 4% 401(k) contribution is a 50% return on that 4% of your salary. It’s unlikely you will find a 50% return opportunity for that money elsewhere right now.

2016 was a year with many lessons to be learned, but these stood out as takeaways that will stand the test of time. Hope you enjoy!

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Fortis Capital Management LLC (“Fortis”) is registered as an investment adviser in Washington, California and Texas. Numerous Fortis clients reside in other states in which Fortis is exempt from registration. Fortis will not provide investment advice for compensation or affect transactions in securities in any state in which it is not registered or exempt from registration.